Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-15-2021, 05:26 PM   #41
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by SecondCor521 View Post
You've probably delegated investment authority on your account to your advisor at the firm. If you have done so, and they are not a fiduciary, then they can do this. Even if they're a fiduciary, they might be able to do this.

That advisor will put you in multiple funds for several reasons:

1. It makes investing look hard, so you're less likely to take control back.

2. They also might be able to convince you to pay account management fees.

3. They can move your money around more frequently, resulting in higher fees (transaction fees, trading fees, front end loads) to them.

4. It gives the appearance that you are broadly diversified.

5. It makes it harder for you to benchmark your performance, which means they can hide their fees and underperformance from you.

Probably more, but those are the ones I can think of offhand.
After all these years. I could have just used VTSAX and sit back/relax?
F.I.R.E User is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-15-2021, 05:30 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,779
Quote:
Originally Posted by F.I.R.E User View Post
After all these years. I could have just used VTSAX and sit back/relax?
That's what I was suggesting back in post #13 on this thread:

https://www.early-retirement.org/for...ml#post2599485

You probably would have had less stress, more money, and paid less in taxes too.

But I wouldn't beat yourself up. EJ does this to millions of people, and what's done is in the past. What can you do now is more important.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 05-15-2021, 05:33 PM   #43
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by SecondCor521 View Post
That's what I was suggesting back in post #13 on this thread:

https://www.early-retirement.org/for...ml#post2599485

You probably would have had less stress, more money, and paid less in taxes too.

But I wouldn't beat yourself up. EJ does this to millions of people, and what's done is in the past. What can you do now is more important.
Someone else said I may have beaten the average S&P 500 market with EJ.
F.I.R.E User is offline   Reply With Quote
Old 05-15-2021, 05:37 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,779
Quote:
Originally Posted by F.I.R.E User View Post
Someone else said I may have beaten the average S&P 500 market with EJ.
That was me in post #30:

https://www.early-retirement.org/for...ml#post2600316

I retracted that claim and admitted I had messed up the math in post #33:

https://www.early-retirement.org/for...ml#post2600342

You very likely did not beat the S&P 500 over time, especially after taxes and risk are accounted for.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 05-15-2021, 05:44 PM   #45
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by SecondCor521 View Post
That was me in post #30:

https://www.early-retirement.org/for...ml#post2600316

I retracted that claim and admitted I had messed up the math in post #33:

https://www.early-retirement.org/for...ml#post2600342

You very likely did not beat the S&P 500 over time, especially after taxes and risk are accounted for.
EJ FA also manages my 401k. If I leave EJ I will be on my own to manage it.
F.I.R.E User is offline   Reply With Quote
Old 05-15-2021, 06:36 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,779
Quote:
Originally Posted by F.I.R.E User View Post
EJ FA also manages my 401k. If I leave EJ I will be on my own to manage it.
That's likely a false dichotomy. There are other asset managers out there with better reputations and lower fees than EJ.

https://en.wikipedia.org/wiki/False_dilemma

You could certainly move your Roth IRA. You probably can't move your 401(k), but it might be possible for another asset manager to advise you on your 401(k) even if EJ continues to hold the account and the assets.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 05-15-2021, 06:49 PM   #47
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by SecondCor521 View Post
That's likely a false dichotomy. There are other asset managers out there with better reputations and lower fees than EJ.

https://en.wikipedia.org/wiki/False_dilemma

You could certainly move your Roth IRA. You probably can't move your 401(k), but it might be possible for another asset manager to advise you on your 401(k) even if EJ continues to hold the account and the assets.
My company offers Financial Engines at a fee to manage 401k. Use that?
F.I.R.E User is offline   Reply With Quote
Old 05-15-2021, 07:56 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,779
Quote:
Originally Posted by F.I.R.E User View Post
My company offers Financial Engines at a fee to manage 401k. Use that?
Up to you. I try very hard not to give advice. I don't want to be responsible, and I don't know your whole situation.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 05-15-2021, 07:58 PM   #49
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by SecondCor521 View Post
Up to you. I try very hard not to give advice. I don't want to be responsible, and I don't know your whole situation.
You can always put a disclaimer if you want.
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:00 PM   #50
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by dirtbiker View Post
There is also the Dave Ramsey investment calculator. It's fairly simplistic, but easy to use. Put in your starting investment and the average of how much you invested monthly, and then play with the annual return until you get your actual total. Then compare this annual return with the S&P 500 annual return over the same time period.

https://www.ramseysolutions.com/reti...ent-calculator
S&P 500 says it has returned about 12% since 1928.

Should I put 10% to be a little conservative?
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:07 PM   #51
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by Exchme View Post
None of this is getting at the risk adjusted returns. If the EJ portfolio is riskier than the market, it might well have beaten it, but you may still not want to own the EJ portfolio in a downturn if it takes a bigger beating.

I think you can get useful information about risk adjusted returns by using Portfolio Visualizer with a hypothetical investment in your fund vs. others and it gives you information about risk like the Sharpe ratio, Sortino ratio, standard deviation and maximum drawdown that will give you a better feel for the risk adjusted return. I would either look up when your fund was founded and go back that far or at least try different dates in Portfolio Visualizer and let it tell you when data became available for your fund.

But even with data, how would you separate luck from skill? Maybe it was a Tech fund and this has been the era of Tech, just like past eras were dominated by coal, railroads, autos or oil. But maybe the next decades will be the era of genomics or space or nuclear or solar or robotics or even crypto and your fund could be left in the dust.

The market is an information processing machine so once something is known, it's in the price before you can blink. Since none of us get to see the future, we are equally clueless about what the market will do next. So two things matter - diversification so you get the market return and the cost to get it. I would get out of EJ and get to a low cost, broadly diversified fund, like a total stock market fund. Vanguard, Fidelity, Schwab all have low cost total market funds available.
What is wrong with a bigger beating in a down market? I benefit from DCA.

I do have just VTSAX at Vanguard for my non retirement account.
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:08 PM   #52
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by pb4uski View Post
What you could do is to do a Portfolio Visualizer Run for each deposit comparing what Fast Eddie has you invested in to some benchmark consistent with the AA that Fast Eddie has you invested in... comparing the performance of each deposit... you could even then add them up if you want to.

I did an exercise similar to this for a friend a few years ago... she had an old 401k that was invested in certain funds... I compared her last 3 year performance with an index fund with a similar AA as her 401k investments... not surprisingly the index portfolio won by a wide margin.
Is that free to do?
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:09 PM   #53
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by disneysteve View Post
More info is needed to answer that. How is the EJ account invested? What funds are you in? You need to make sure you're doing an even comparison to see how those funds performed compared with comparable index funds.
I posted what AF Class A funds I am invested in. Please take a look.

I am trying to compare with VTSAX.
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:10 PM   #54
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by disneysteve View Post
Exactly. Actively managed funds are supposed to beat the indexes; they do not.
So how are these fund managers keeping their jobs?
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:13 PM   #55
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by bloom2708 View Post
Rather than looking at your past results, look into the future.

https://www.dinkytown.net/java/compa...ment-fees.html

Use 3 different fee structures. Use your actual numbers and contribution rates. Use a reasonable return rate. 4% maybe.

Our all up cost at Vanguard is .06%

Use .10% 1% and 1.5% (or your best guess based on your funds and fees at EJ).

Look out 30 years. Well, you may not want to.

Just 1% is quite awful over 30-40 years.
$54K divide by about 13 years?
F.I.R.E User is offline   Reply With Quote
Old 05-16-2021, 06:17 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,727
Quote:
Originally Posted by dirtbiker View Post
There is also the Dave Ramsey investment calculator. It's fairly simplistic, but easy to use. Put in your starting investment and the average of how much you invested monthly, and then play with the annual return until you get your actual total. Then compare this annual return with the S&P 500 annual return over the same time period.

https://www.ramseysolutions.com/reti...ent-calculator
If I understood the OP correctly, he has added assets to the account, so those will look like account growth to any calculator. He has to subtract the current value of those assets from the account value before he tries to get a rate of return.

But the real world is that if he has been paying front end loads to Fast Eddie, his return will be in the toilet vs the S&P. Just that fact is enough; no mathematics necessary.
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 05-16-2021, 06:22 PM   #57
Full time employment: Posting here.
 
Join Date: Oct 2020
Location: Sugar Land, Texas
Posts: 856
Quote:
Originally Posted by OldShooter View Post
If I understood the OP correctly, he has added assets to the account, so those will look like account growth to any calculator. He has to subtract the current value of those assets from the account value before he tries to get a rate of return.

But the real world is that if he has been paying front end loads to Fast Eddie, his return will be in the toilet vs the S&P. Just that fact is enough; no mathematics necessary.
What is my actual ROR after fees?
F.I.R.E User is offline   Reply With Quote
How are my Rate of Return in my Roth IRA?
Old 05-16-2021, 07:24 PM   #58
Full time employment: Posting here.
Whisper66's Avatar
 
Join Date: Apr 2014
Location: Houston
Posts: 906
How are my Rate of Return in my Roth IRA?

Quote:
Originally Posted by F.I.R.E User View Post
So how are these fund managers keeping their jobs?


Ask yourself why you are with EJ. They provide you something you value. Only you can answer what that is. But you allow them to manage your money without understanding the real monetary returns they are providing. If you understand why you’ve stayed with them this long, you will understand why they are keeping their jobs. They fill a need for some people.
__________________
"Learn everyday, but especially from the experiences of others. It's cheaper! " - John Bogle
Whisper66 is offline   Reply With Quote
Old 05-17-2021, 05:47 AM   #59
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,254
Yes
Quote:
Originally Posted by F.I.R.E User View Post
Is that free to do?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 05-17-2021, 11:21 AM   #60
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 13,938
Quote:
Originally Posted by F.I.R.E User View Post
So how are these fund managers keeping their jobs?
People are bad at math.
People want someone to handle the "complex stuff".
People have no interest in saving or investing, often don't even know what the interest rates are of loans, savings, etc.
People don't read EVERY page of the annual report that the brokerage sends them so they never see the 1%->2% fee.
People think 1% is only 1 out of 100 so that's low.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Reply

Tags
edward jones, fidelity, vanguard


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Confused choosing between: 401K, Roth 401K, Roth IRA or Traditional IRA? krldrummerboy FIRE and Money 22 05-26-2016 11:46 AM
Can I do both Backdoor Roth IRA and Mega Backdoor Roth IRA? growerVon FIRE and Money 8 07-30-2015 01:04 AM
converting IRA to Roth IRA based on new Roth Rules vs. 72t mbmmccoy FIRE and Money 27 09-28-2009 06:27 AM
Questions about limits surrounding ROTH IRA, SEP IRA and ROTH 401k RockSplat FIRE and Money 14 06-08-2009 12:30 PM
Can I max out my Roth IRA, Trad. IRA, and SIMPLE IRA? thefed FIRE and Money 9 09-24-2007 04:52 PM

» Quick Links

 
All times are GMT -6. The time now is 03:34 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.